MemberDecember 28, 2010 at 7:50 pm
All the main retailers are selling this as a reason to dash out and spend money in the "sales" when in fact the price increase on a retail item is not that much,
A £500 quid telly was £587.50 inc vat
it will be £600 after the increase, so a saving of £13.50.
not really a big issue I would have thought, unless you NEED to spend a large amount, and no reason to "stock up" on something that is not essential.
Anyway, do you think the increase will affect your business and if so in what way?
MemberDecember 28, 2010 at 7:57 pm
I agree Peter, its only a 2.5% rise so unless your buying a TV worth a few grand then its a bit pointless. Then again, if you can afford a TV worth a fair few grand then a 2.5% increase isn’t worth worrying about.
I’m vat registered but only voluntary and I think this one will effect my sales so thinking about pulling out of the vat game – think I may be better off with not being registered.
MemberDecember 28, 2010 at 8:04 pm
I doubt it should affect sign makers much. Since sign making is predominately a business to business service, and the majority of businesses are themselves VAT registered and can claim VAT back on their expenditure it’ll make no difference.
But given that VAT registered businesses are effectively unpaid tax collectors it’s high time small business owners got paid for collecting this tax.(hot)
MemberDecember 28, 2010 at 8:16 pm
I have said what Phill has said about unpaid collectors I hate doing my vat returns with a passion 👿
John if you opt out think about all the vat you will pay on your supplies this can add up to a hefty amount at the end of the year 🙄
Personally I don’t think this will make a difference to our business
MemberDecember 28, 2010 at 9:00 pm
Guess it is going to push my expenditure up as I am not VAT registered. Only time will tell if I will be able to pass that extra expense on to my customers.
MemberDecember 28, 2010 at 9:04 pmquote Phill Fenton:
I am not certain that most on the boards do biz 2 biz
many are supplying to end users, you only need to look at the web pages to see how many sell t shirts, mugs, canvases etc to the general public.
So maybe it will affect more than you think?
MemberDecember 28, 2010 at 9:54 pm
I probably do more business to business than business to consumer. Many companies don’t like to deal with non vat registered companies.
In Canada you used to get paid to collect sales tax. Should be here too.
MemberDecember 28, 2010 at 10:26 pm
I guess one way to gage it is, how much better off did everyone become when it dropped to 15%?? Products in general is getting cheaper across the board, the lift in vat will be swallowed by the drop in costs. As a country we are set to be hit from other angles, this will be the least of our worries.
MemberDecember 28, 2010 at 10:46 pmquote Bob Clarkson:
Wait until "hyper inflation" kicks in as a result of the "quantitative easing" that our political leaders have slipped in 😕
MemberDecember 28, 2010 at 11:01 pm
You’re on the money Phill, we’re soon to be in more than enough trouble. It’s going to be interesting, but possibly expensive. Money to be made though. I’ve been prepping for this for some time, economy is more than a passing interest to me.
MemberDecember 28, 2010 at 11:47 pmquote Bob Clarkson:
I wish I had your insight to the future, to be preparing for it with so much confidence.
We all try and forecast the best way to survive, and do what we think is the best thing.
But none of us know what is really round the corner, even the people "in the know" can be wrong. We will all get through it though, we always do. People are very resilient, that’s human nature.
in ten years time, on average, we will all be in the same relative position.
MemberDecember 28, 2010 at 11:54 pm
I don’t think the real reason for upping vat is to just to make an extra 2.5% for the government, its to persuade new businesses to become VAT registered so they make billions in new VAT.
Dont think it will affect my sign business but will on another business I am not vat registered on.
PS we should be paid to collect taxes too!
MemberDecember 29, 2010 at 12:42 am
agree with you Nigel on getting paid to collect taxes 😀
bob prepping and being able to predict the future of the economy is a gallant one….if only, id either be a multi-millionaire, or a pauper 😕 especially in the sign business 😉
MemberDecember 29, 2010 at 1:30 am
The sign business is my hobby, I’ve not done it full time for over 15yrs, and even then I was doing property development along side. I have a couple of core businesses, and I speculate. I’m not doing fortune telling, all the factors are there. This has being in the making for a few years now, there’s money to be made again to the degree there was in the 80s. I’ve just got 20 odd years more experience now.
You don’t always have to predict what’s going to happen in the future, but you do have to have a grip on exactly what’s happening now.
I’ve spent hours upon hours over the years learning this, and I had a proven mentor. I can assure you it pays off time and time again, hold your nerve and don’t be greedy is the balance.
We can only earn so much money with our hands, a bit of guts and a bit of knowledge makes a difference.
I agree people are resilient, but the next ten years won’t be the same as the last.
With respect to people in the know, I’m fed a few crumbs, obviously there’s people far better at this than me, but I do quite ok.
MemberDecember 29, 2010 at 9:48 am
Britain introduced "Quantitative easing" back in March 2009.
Since then share prices have rocketed! Demonstrating clearly that financial institutions are well aware of the long term inflationary effect of what the government have done to the economy. The value of money is eroding quickly – better to spend it on assets that can be sold again later once the money supply has stabilised
MemberDecember 29, 2010 at 10:16 am
In other words – we should all be putting our prices up by at least 5% (before VAT is added) simply in order to stay still and counter the effect of the last twelve months of inflation.
MemberDecember 29, 2010 at 10:27 amquote Phill Fenton:
or become leaner and meaner, find ways to produce cheaper, and sell more competitively. By just increasing prices it is only adding fuel to the fire. 🙁
Prices do need to be increased on a regular basis though, to keep up with your own materials and cost increases.
What assets do you recommend Phil?
is there something that is guaranteed to give a real increase in its value over the next 10 years?
MemberDecember 29, 2010 at 10:35 am
The value of money had to appear to go down, because people weren’t spending enough. I don’t mean borrowing enough, I mean spending enough of what they already had. New money needed to be freed up, making people believe it wasn’t worth holding onto is the best way of achieving that.
If someone had for instance 50k in the bank, they’re likely to get at best £30 a week interest for it, less if on 40% tax. So what do they do, keep it, buy a new car and have a couple of decent holidays, treat the kids/grand kids. We now are developing a situation where that starts to seem logical.
If you buy something now, be it another property, classic car, build an extension etc, you will have your asset in one form or another even if it’s value drops. When this all hits the fan, so to speak some things will be very expensive, but some things will be ridiculous bargains. There will only be a certain number of people who can clear them up.
MemberDecember 29, 2010 at 10:36 amquote Peter Normington:
MemberDecember 29, 2010 at 10:41 amquote Phill Fenton:
I’ll give you a tenner for it.
can you drive it down this weekend?
MemberDecember 29, 2010 at 11:12 am
It doesn’t go 😳
MemberDecember 29, 2010 at 11:13 am
Can’t…it doesn’t go 😳
MemberDecember 29, 2010 at 9:22 pm
The majority of my customers are not VAT registered and I have been asked so many times the normal question "can we lose the VAT" Well I lost an £800 job just before Xmas because I wouldn’t "lose" the VAT. So as from 31st Dec I am no longer VAT registered. Thus on a lot of my labour intensive jobs which is just about every job I get I will be saving my customer 20% so I think I can say de-registering for VAT will help my company and save my wife the VAT hassle that she hates doing. VAT on materials is so small a percentage of my jobs, so as a one man band I will be more than happy.
MemberDecember 29, 2010 at 9:31 pm
That’s the way I was looking at it Mike – when I first started, the company I used to work for put a lot of work my way but insisted I was vat registered. I don’t get much work off them nowadays, if any, and a lot of my customers aren’t vat registered either so I’m leaning to de-register too!
MemberDecember 29, 2010 at 9:49 pm
the issue though, is even though most of your customers may be not vat registered. they will pay it on most of the goods they buy, signage is only a small percentage of a business’s outgoings, so not sure how you will have the advantage over people or companies that charge vat, especially if you have to pay vat on your materials?
A small builder or decorator, for instance will still be paying vat for his materials. they are only available from stockists that are vat registered. so not sure why they would not pay the vat for signs?
one way is to include the vat in your quote., rather than adding it as an "extra" that way the buyer feels happier. But you must have a bit of small print saying its included
MemberDecember 29, 2010 at 10:07 pm
Thing is Peter most of what a signmaker does is labour intensive so if a customer wants a van doing for say £200 then if you aren’t VAT registered you can do that but if you are VAT registered then it’s going to cost them £240 and as they can’t claim the VAT back then the extra £40 comes out of their pocket. Sure they would do the same with building materials if they could.
MemberDecember 29, 2010 at 10:26 pmquote Martin:
Martin I have to disagree, if you are asked to supply a large illuminated backlit sign, with 3d letters and led’s then you would probably have to buy it in, so most of the cost would be in materials, the fitting would only be a small proportion,
Yes, if you paint signs your labour is the main cost, but I would think that all other signage does include quite a lot of material and equipment costs.
MemberDecember 29, 2010 at 10:27 pm
Don’t get some of the logic here about not being vat registered. By not being vat registered you are paying for the vat on the goods you buy which decreases your profit???
Signmaker is vat registered he charges 20% vat on his job lets say job cost £100 the vat = £20
lets say material costs including rent, elect telephone, stationary, computers software etc etc are £60.
Signmaker is not vat registered charges £100 with no vat. Costs £60 the Vat = £12
or add the vat as a cost, the price is £112
By not being vat registered you are losing money as you are taking the hit on the vat you paid or costing the vat registered customer more money than buying from a vat registered signmaker.
MemberDecember 29, 2010 at 10:32 pm
Peter, I have been asked to do very little work where the material costs were high, not done a lot of large backlit signs with 3d lettering and led’s. Most of the work I have done is vehicle livery and shop facias where the material costs are quite low compared to the finished price which makes a big difference VAT wise.
MemberDecember 29, 2010 at 10:33 pm
Martin, surely high value jobs will be mainly bought by vat registered businesses anyway ie those with a higher turnover and have to be vat registered? and low value jobs the vat is neglible?
MemberDecember 29, 2010 at 10:40 pmquote Martin:
the vat threshold is I think is 70k
so if your turnover is less than this and dont buy a lot of materials then stay unregistered, it is up to the individual what works for them. There are good arguments not to be vat registered if your turnover is below the threshold.
to be registered or not, is not what this thread is about, it was to ask if the ones that are vat registered will be affected by the increase,
sorry I should have been more specific
MemberDecember 29, 2010 at 10:41 pm
wrong post sorry
MemberDecember 29, 2010 at 10:44 pm
Nigel, yes your probably right so a VAT registered business may well be better off dealing with a VAT registered signmaker especially for high cost items but a lot of start up businesses aren’t VAT registered so can’t claim it back, especially tradesmen like Builders and decorators who don’t have premises and just have a van.
MemberDecember 29, 2010 at 10:47 pmquote Martin:
Martin I find it hard to believe that a "builder" can turnover less than 70k its only the cowboys that aren’t vat registered. (builders, not sign makers)
MemberDecember 29, 2010 at 10:49 pm
Peter I used the builder as an example because you had but I did say a start up business, if a builder was just starting out he may well leave registering for VAT until he had to.
MemberDecember 29, 2010 at 10:54 pm
most builders I know are VAT registered and are cowboys 😕
MemberDecember 29, 2010 at 10:58 pmquote Martin:
We are going a bit of topic, but if I was starting any new venture, that bought in large quantities of materials, such as a builder would, then one of my first priorities would be to register for vat, Ok there are a lot of cowboys out there that get away without being vat registered, but i for one would on that issue alone, would not employ then to do any important work. By not being vat registered it says to me they do not have a good track record, people who supply just labour, are in a different category,
just my opinion
MemberDecember 29, 2010 at 11:08 pmquote Phill Fenton:
Phil, you should mix with a better class of people.
Some of my "builder" customers are excellent, and you really should not make general statements, most builders are tradesman, and do a professional job.
as signmakers we have the same problem with perceived ideas of our profession,
we probably have as many cowboys in our industry as in the building industry, as proven many times on the boards, I just hope that people dont start to make the same comments about signmakers….."they are all cowboys"
MemberDecember 29, 2010 at 11:09 pm
Not really off topic Peter because it is all relevant, like the builder we are all trades people, we all buy materials and produce something from them. You could apply the same to any trade.
I have lost work because I wasn’t VAT registered so obviously you are not the only one that thinks that way. I would like to think I have gained work that I wouldn’t have got if I had been VAT registered but I don’t know that for sure. It’s just something I believe to be true.
It’s not really relevant to me now but it would have been nice to think I could have been trusted even though I wasn’t VAT registered.
MemberDecember 29, 2010 at 11:10 pmquote Peter Normington:
You’ll soon change your mind if you ever employ any of them to build an extension 😕
MemberDecember 29, 2010 at 11:13 pmquote Phill Fenton:
had one done over twenty years ago Phil
its still standing…..
MemberDecember 29, 2010 at 11:14 pm
Times have changed Peter 😕
MemberDecember 29, 2010 at 11:19 pm
Yeah you are right,
times have changed,
any cowboy can make signs nowadays,
just a cheap chinese plotter and some ripped off software,
builders only need a few a few bricks from B & Q and a 2quid trowel and they are in business….
MemberDecember 29, 2010 at 11:22 pm
Do I detect a hint of sarcasm :lol1: :lol1:
MemberDecember 29, 2010 at 11:24 pm
Think Peter is having a go at me for not being VAT registered.
MemberDecember 29, 2010 at 11:30 pm
Martin I am not having a go at you at all,
I do enjoy sniping Phil though, 😀
MemberDecember 29, 2010 at 11:32 pm
:lol1: :lol1: :lol1:
MemberDecember 29, 2010 at 11:38 pmquote Martin:
my point also is though, Martin, vat is still being paid on the transaction regardless, even if both parties are NOT vat registered so why not just register. So you (for instance) are paying vat or passing the cost onto the customer for most of your overheads and material costs.
A point for any business considering vat registration is to bear in mind that you can claim vat back on the last three years purchases (fixed assets only)
I can personally see little advantage in the sign industry of not being registered even if voluntarily.
MemberDecember 30, 2010 at 12:06 am
the majority of my work is cut vinyl, therefore it makes little difference to me, I don’t use huge meterage of vinyl and when i buy things in, i simply include the vat before I add my markup, the customer pays it.
I would think that only about 20% of my outgoings are materials, much of the rest is fuel and some bills etc, being home (workshop) based, my bills are minimal.
a great deal of my customers are not vat reg’d, most of those who are reg’d (regulars in particular) don’t see it as a problem as long as the price is good for them. i don’t have to be cheap, just competitive, I usually get the work regardless.
only once or twice can i recall ‘not being vat reg’d’ as the reason for not getting the work. A new customer told me off for saying ‘including vat’ rather than ‘no vat’ recently but, still went ahead with the order!
if i register then i’ll get vat back on my fuel (about the only reason i would do it) and materials but, I would also have to keep much more detailed accounts, ensure money was there to pay the vat man each whenever, and spend time doing ti.
as a small one man band who’s limited to around 25hrs a week in the workshop, and who’s had little problem with not being vat reg’d, i don’t see it as being something i will rush to join in a hurry!
I know many self employed people who are well under the vat threshold, and i mean well under it, maybe a £30-40k gross and a nett £16-20k tops as an income,
anyways, as others have said, and as i said when they lowered it to 15%, it makes naff all difference unless you’re spending many many thousands, even then, if spending 50k on an extension, another £k or two is not a big deal.
the 2.5% will have little affect on me or my yearly accounts.
MemberDecember 30, 2010 at 12:15 amquote Hugh Potter:
Hugh, I hope you have not stated that in writing on your invoice or quotes.
if you have it is actually fraudulent, because your customers would expect to claim the vat back, if they try to, you could be in trouble mate.
MemberDecember 30, 2010 at 1:40 amquote Peter Normington:
Drat! I must have did the same thing as Hugh a hundred times!
Anyway, to add my obviously under informed opinion I dont think it will affect me as most stuff I do is vinyl only so vat is minimal.
On a related point however: Do you think that someone non VAT like myself could benefit from advertising his non VAT registered status?
Would advertsing that attract or repel customers regardless of the VAT increase?
Would it attract or repel less or more customers with the VAT increase?
MemberDecember 30, 2010 at 9:41 am
I suspect it would attract the "wrong type of customer" and repel the "right type of customer".
My tag line used to be "continuously striving to improve the quality of our customers" 😕
MemberDecember 30, 2010 at 9:45 am
I think advertising the fact you’re not vat registered might attract punters off the street the same way they are flocking to the shops to beat the vat increase. They are up for a bargain and if they are intent on buying the goods in the first place they are saving 2.5% on the increase. Not vat registered they would be assuming they would save 17.5% on a company that was registered – doesn’t always work like that.
I don’t think it would attract established businesses though, maybe new companies on a tight budget!
MemberDecember 30, 2010 at 11:04 am
Nigel, pretty much all the work I do is cut vinyl, mainly vehicle livery so I am not paying a lot of money VAT wise to start with. Overheads aren’t really worth claiming for either. I don’t pay VAT on my rent and I don’t have a phone at the unit so the only thing I could claim back is the electric which is never that high and is at a lower rate to start with. Consumables I don’t spend a fortune on either so any VAT I could claim back would be really minimal. Because all my work involves mainly labour this forms the major part of the selling price of any job I do. I can actually add the VAT I pay into a job and still quote a very competitive price as it’s generally only a few quid.
Never really thought about it this way before but if I were VAT registered I would be paying the government for the privilege of working seeing as I am paying them VAT on the time I spend working :lol1:
Anyway the point is that if your customer is VAT registered then it won’t make any difference who they buy from as they can claim the VAT back but an unregistered business can’t claim the VAT back so can end up paying more for the job.
MemberDecember 30, 2010 at 12:13 pm
sorry Martin thats incorrect – if your customer is VAT registered it does make a difference who they buy from given two similar quotes as they can only claim VAT back with a VAT invoice
Vat registered is the way to go for most IMHO
MemberDecember 30, 2010 at 12:24 pm
What people are forgeting here is that paying vat is not really relevant to someone in business. Those that say they can’t claim back vat are wrong. They do get it back as part of the business outlay. If your vat registered you keep the vat and claim the rest as a business expense, if your not registered they you claim the whole lot as a business expense. Heres an example….
Signmaker A is registered.
It costs him £100 plus vat for materials, to him the vat is not relevant so he sees it as it has cost him £100. He wants to make £100 profit so he charges £200 + vat = £240 ( at 20%). He takes back his £20 and pays the other £20 to the vat man, He claims £100 as the business outlay. giving him £100 clear taxable profit.
Signmaker B is not registerd
so the materials actually cost him £120 so to make £100 he has to charge £220, so to a customer whos not registered then he is cheaper by £20.
He claims £120 as his business outlay and makes the same £100 profit.
But in reality the customer is no better off except that he has to find an extra £20 now, but when his tax is calculated at the end of the year from his profits he either claims the amount without vat as a business expense before he makes a profit or the amount with vat before he makes a profit. Its all part of the overheads.
Someone who is registered is merely collecting the money on behalf of the government free of charge.
MemberDecember 30, 2010 at 12:53 pm
Martin the VAT registered customer would be better off going with the VAT registered signmaker who is £ 20 more expensive but the customer claims back £40 vat making him £20 cheaper 😕
MemberDecember 30, 2010 at 12:59 pm
Remember that even if you can’t claim the vat back it’s still tax deductable.
MemberDecember 30, 2010 at 1:01 pm
Your missing the point John I was trying to explain that everyone claims back the vat as a business expense in some way. In your example the client now claims £200 as his expense when the non registered client claims £220 as his expenses.
MemberDecember 30, 2010 at 1:05 pm
Sorry John I must have explained that badly 😳 Point I was trying to make was that if a job was done for say£200 then a VAT registered signmaker would be charging £240 with the VAT, a registered company could claim the £40 VAT back meaning that the job still only cost them £200 but it would cost a non registered customer £240 to buy from a registered signmaker as they couldn’t claim anything back.
I was VAT registered when I first started and I’m not against it but it doesn’t seem to work for everyone, with what I was making, being able to claim back, the time it took to do it didn’t seem to be doing my business a lot of good. Maybe if I had been a bigger company or did a lot of other types of work it would have worked better for me. I can only comment on my own experiences and for me it didn’t seem to work to well.
MemberDecember 30, 2010 at 1:30 pm
Ok im no accountant but
offsetting against tax isn’t the same as claiming VAT back which is almost instantaneous (every three months for me) and is 100% back of what you spend re the VAT bit
MemberDecember 30, 2010 at 4:41 pm
I agree that if you’re mainly just doing vinyl, there’s little point in being vat registered, and if a lot of your customer base is not registered it would actually be detrimental.
I de-registered on the sign front some years ago, I only really needed to be registered when I used to do a lot of council work, you really needed to be registered to get that. I also used to do a lot of acrylic signs, which easily whack the turnover up too high.
If I went into an area where my production wasn’t such a high profit ratio, or I figured I’d by a 20k van I’d probably re-consider.
There is, and will be a lot of new companies springing up, bit of building, property maintenance etc, they won’t be registered. There will also be lots of trades de-registering so they will be more competitive to the general public. It’s easier for no-registered companies to clear them up.
I think that unless you’re turning over in excess of 70k where you have no choice, or you have a fairly set client base of vat registered customers, your probably best off out of it. It’ll give you a better edge if you’re a small business.
MemberDecember 30, 2010 at 4:53 pm
Think I’ll chime in here, it is worth taking into account your competitors. If they are VAT registered you’re no worse off, the smaller business will pay VAT regardless if they go to you or not – you just have to be better for the competitive edge. I’ve been VAT registered since 1988 and I do lots of work for small firms and one man bands and not one has ever complained about me being registered. I’ve found the majority are so used to paying VAT on everything else they buy why should signs or van lettering be any different. To them, lettering tends not to be an everyday purchase and they swallow it the same as diesel and everything else they buy to run their business. I suspect this thread is alot of conjecture over something that will not be a major issue to most.
I’ve just had the new prices for garments and they have shot up far more than VAT will. I bet we still sell them though.
MemberDecember 30, 2010 at 4:57 pm
I think there are pro’s and cons for both and what suits one person may not suit another, it really is one of those areas where you have to decide what works best for you and then review it if and when your circumstances change.
When I was working last I don’t think it suited me to be registered so I didn’t register, when/if I start working again I will look at it again and see how I stand at the time.
I’ve dealt with VAT registered customers where the person placing the order had no idea that the company claimed VAT back, bad training on the companies part maybe but as far as they were concerned that was the accounts departments job not there’s even though they could actually have been saving the company money if they had known.
MemberDecember 30, 2010 at 5:15 pm
I was vat registered with the signs from 86, when I started vinyls, and de-registered in the mid 90s. I found more and more people were beginning to begrudge the vat.
As it’s not an everyday cost, yes people will swallow it. People will pay pretty much anything to get done what they need done. For instance my car does 15mpg, truly horrendous, but I don’t care what it costs, I’ll pay it.
Change the situation so every penny counts, which is soon to happen across this country, and people will be more keen to save some money. Getting it 20% cheaper of a non-registered must be considered, especially is there a good signmaker
MemberDecember 30, 2010 at 10:24 pm
i’ve checked my terms and invoices etc, i don’t tell people it’s including vat, I don’t specify anything about VAT.
I’ve had a couple of queries in the past -with regards my vat No.- at the quote stage but it didn’t lose me the job.
i normally tell people outright that there’s no vat as i’m not reg’d. as well as some of my regulars, many of my customers are start-ups and small businesses who aren’t vat reg’d, i really would think it’s a matter of a handful of times it’s ever been brought up!!
like i said though, i doub’t it’ll affect me at all with any significance.
MemberDecember 30, 2010 at 10:59 pm
edited see below
MemberDecember 30, 2010 at 11:24 pm
The mention of fuel was purely down to the fact Alan said people just accepted the cost of their diesel, basically because there is no choice nothing more. If you want or need it, you have to pay for it, even if you don’t like it.
I don’t think I made any reference to avoiding legal responsibilities either, just purely an observation on customer groups in our respective fields.
To survive in business, the first thing to remember is "money is money" if it’s earned it make no difference if it’s from a multi-national company or the guy round the corner who’s starting up and needs a site board.
Ironically, your reference to the "here next week, let alone next year." type customer, is by definition condescending.
I also find it a little disturbing you use the word argument, I assumed it was an all round discussion to try and learn from each other and to gain experience from a variety of other peoples view points. It need have little relevance who actually agree with who, purely the fact someone has that specific view point, by the law of averages they are unlikely to be alone.
MemberDecember 31, 2010 at 9:16 am
my choice of words was not very apt, probably induced by a little to much Christmas cheer 🙁
They seemed like they made sense last night, but this morning were not like I intended.
MemberDecember 31, 2010 at 12:13 pmquote James Martin:
Problem here is that the average punter will expect a 20% lower price than your VAT registered competitor.
MemberDecember 31, 2010 at 5:20 pm
Peter, don’t think it’s just a case of people expecting you to be at least 20% cheaper, as someone else has already said I think you would end up with the wrong sort of customers as well.
MemberDecember 31, 2010 at 6:59 pm
I apologise to you too Peter. I put forward a controversial opinion which in honesty fueled a reaction. Coupled with this I put it across in a very one sided manner.
I’d be happy to call it "six of one and half a dozen of the other" if that sounds fair to you, and I will try to be a bit more thoughtful how I word things in future.
On a lighter note, I wrote a Fiesta van DRY today. I’m not going to pretend it came natural, but I will admit I got it on there with no creases or bubbles anywhere. Did I do it quicker than I could of wet, no I didn’t. Could I in time do it quicker dry than wet, very possibly!!!
MemberDecember 31, 2010 at 7:01 pm
I’m not vat registered myself and don’t advertise this fact, all my invoices and quotes state vat at 0% and have no problems with the increase of vat but will add the extra 2.5% in my pricing.
As for attracting the wrong type of "customer" when they discover your not vat registered is not a problem for me as long as they pay up.. after all their money is just as good as anyone Else’s
MemberDecember 31, 2010 at 8:02 pm
Sorry Andy – I should explain what I mean by "wrong kind of customer"
My response was triggered earlier when James asked if he should be advertising the fact he is non VAT registered in the hope that this would generate more enquiries. My response was based on my feeling that this would attract the bottom end of the market (nothing wrong with that but not usually a lucrative way to run a business unless you are dealing in volume sales). Given that sign making is a labour intensive occupation I have always been of the opinion that competing on price alone was not likely to result in a great deal of success. You would end up being very busy all the time whilst making little or no profit.
Quite simply – for me the best customers are those that do not focus on price alone. When the first question I am asked is "how much" my heart normally sinks. I much prefer to deal with customers who will listen to the options and hopefully put forward a budget so that I can respond with a realistic set of solutions to their enquiry.
MemberDecember 31, 2010 at 10:22 pm
Andy, I meant pretty much the same as Phill, I’ve been there. At one point I was far to cheap and the only sort of customer I was getting were those that want everything for nothing, waste your time and send all their mates along who also want everything for nothing. I ended up working 24/7 and still not making enough money to pay the bills let alone live.
MemberJanuary 4, 2011 at 2:18 pm
With respect to Phil and Martin. You are really talking about something different now. The customers you describe will always try to get a ‘deal’ whether VAT is included or not. They don’t come into the equation. The question was I thought, would being registered or not registered make any difference to my business. My answer is still it depends, but if you expect to deal with larger companies they will expect you to be registered. They look for this as a demonstration of company size and viability. (whether I agree with their method of assessment is neither here nor there though).
I know some of the companies I deal with would probably not buy if I was not charging VAT. They want to have the opportunity to claim this back against their own sales. Unless you are 20% cheaper than the guy who is VAT registered and quoting against you, you will struggle to compete. Fact.
Just my opinion 🙂
MemberJanuary 4, 2011 at 3:40 pmquote Peter Mindham:
I have never come across not being registered for vat a problem, my core business is printing small run pvc banners, i sell to a few large companies who are vat registered and have never asked me for a vat number, even though they could get their banners cheaper with vat included.. they still deal with me because of the service and quality i provide them, this is worth more to them than claiming back the cost of vat.
Log in to reply.